My take on the commodity supercycle and stock market zeitgeist...and the new era of precious metals, uranium (just bottoming, btw)and alternate energy. As I have said here since 2005 "Get ready for peak everything, the repricing of the planet and "black swan" markets all over the place".

4 May 2009

Mad as Hell ~ Dateline SBS

CROWD: What do we want? Free choice! When do we want it? Now! We say fight back! Are we ready to fight? Yes! Are we ready to win? Yes! Are we ready for change? Yes! Do we want it now? Now!

WOMAN: Why do we have to stand out here in this country, the Land of the Free, and beg for something that we deserve?

Earlier this week, members of America's fastest growing trade union, the SEIU, gathered outside the Bank of America's New York headquarters to protest against the huge bonuses its executives paid themselves using government bailout money - a situation these struggling workers label as obscene.

WOMAN: We deserve to be able to live comfortable like everybody else. You take the taxpayers' money and make sure your house is paid for, but here we are losing our homes.

What especially irks this group - and many others like it in the US - is the way in which America's largest financial groups are being rewarded with government help for their bad business judgments - while tens of thousands of Americans are losing their homes.

ANDY STERN, PRESIDENT – SEIU (SERVICE EMPLOYEES INTERNATIONAL UNION): Our country - and unfortunately we spread it to the rest of the world - followed this market worshipping, privatising, deregulating, trickle-down economic philosophy, and it failed.

As head of the SEIU, Andy Stern has become the most outspoken union leader in America and he's leading a charge to reclaim and remodel the country's financial system before it spirals out of control.

ANDY STERN: The only way we're going to make change is by being in the streets, raising our voices, fighting for change, because people don't give up power without a struggle and we intend to get it back and build a new American and global financial system that takes care of everyone - not just the people at the top.

In the heart of New York's financial district — the epicentre of the global crisis - tourists still line up eagerly to have their photo taken with that iconic emblem of American economic clout - the Wall Street bull. But amongst these onlookers there's at least one who's started to question the faith Americans have in their financial system.

JOSE GONZALEZ, FORMER HEDGE FUND MANAGER: There was no question that things were going to slow down - they couldn't continue at the pace that they were.

Jose Gonzalez is a former hedge fund manager who has learned some hard lessons from the excesses of America's casino-style capitalism. For several years he was coasting on a high but with his fund leveraged way beyond it's capacity to repay, the global credit crunch soon made its mark, and by January he was out of a job.

JOSE GONZALEZ: The markets were moving much quicker than people could react, and that's what happened, that's when you see these huge gaps down in prices and in the markets. And people start to get scared, and then when they can sell, they try to sell, but then it's not at the price that they were thinking and then they have to try and push everything out the door, and only so many things can go out, and the downward spiral just happens when everybody goes rushing for the door.

Now, with plenty of time on his hands to reflect on the crash that cut short his highly paid career, Jose is the first to admit that the crisis was brought about by a simple and collective human flaw - greed.

JOSE GONZALEZ: Greed on every level. People will tell you that the whole thing started with the housing. The housing issues that happened in the states and the easy loans, and packaging of these loans, and restructuring and reselling and this, that and the other - I mean it's greed on every level.

I think most people live outside their means and the difference is if somebody lives outside their means and they're making $30,000 a year and feeding a family, or $30 million a year.

Jose Gonzalez now meets every week with other New Yorkers who've suddenly found themselves out of work. They call themselves the 405 Club, in reference to the weekly US dole payment of $405.

GARRETT, 405 CLUB MEMBER: I was a recession casualty as of mid December, so it's been over four months now and I was supposed to have an interview today which was cancelled a couple of days ago.

Its members say the 405 Club is the fastest growing alliance in America - formed to provide the country's unemployed with a support network and an outlet to vent their anger at a financial system that let them down.

WOMAN, 405 CLUB MEMBER: I think it's absurd when a company can publish a loss and be giving bonuses. There shouldn't be rewards for "Oh, the damage was only reciprocal "and we had to lay off 100 people to pay your bonus."

JAMES MACKLIN, BOWERY MISSION: We're all guilty of this financial crisis. All of us. Your country, my country - all of us wanted something for nothing, and now we're paying the piper.

Not far from the big end of town, James Macklin is also feeling the pinch of the financial crisis. As a director of the Bowery Mission, one of the oldest soup kitchens in New York, he's now catering for the city's rapidly growing number of homeless and destitute residents.

JAMES MACKLIN: We, the people, made some bad mistakes too, OK. You don't read fine print on your credit card - they send you plastic and you swipe it, OK. Then later on you find out you're over your head. So we all are to blame, not just the government - we all are to blame for wanting something for nothing.

As the effects of the crisis deepen, the demographics of New York's homeless are also beginning to change - with increasing numbers of families seeking help from charities like the Bowery. But not everyone here shares the idea of collective responsibility. Some, like the mission's chaplain, are furious that while those at the bottom rung of society continue to be sidelined, the financial institutions that sparked the crisis have been pulled out of the mess with multibillion-dollar rescue packages.

PASTOR REGGIE STUZMAN, BOWERY MISSION: I think it's outrageous. I think even our government being a part of so many bailout situations to white-collar people. I mean there are so many issues on this side of the spectrum - with mental health, homelessness, addictions, housing. Obviously if you steal, you connive, if you take stock from holders and all this, society still seems to play a role that we will help you - even though you've done bad.

While the US Government may have had little choice but to prop up its ailing banking system, many Americans are bitter that billions of their tax dollars are being handed over to the very institutions they hold responsible for the crisis.

ANDY STERN: We can not trust people at the top to be looking after our best interest. We can not trust CEOs to not be greedy and enrich themselves at the expense of their shareholders or their communities. We can not count on the people at the top to be loyal to their country as opposed to their company and we should also appreciate that people at the top aren't as smart as they think they are.

Union boss Andy Stern is hoping that President Obama can eventually bring America's banking system to heel. In the meantime, he and thousands of his union members are continuing to exert pressure on those they hold responsible.

ANDY STERN: We'd like you to deliver this to the Bank of America, to tell them that consumers, taxpayers, Americans need them to change how they handle credit cards, need them to have new leadership, need them to stop foreclosure - it's time for change to make this an economy that works for everyone. Thank you very much for taking this on behalf of all of us.

ANDY STERN: In a global economy, we are not going to build it by rewarding CEOs and having the gap between the rich and the rest of the population grow so wide and so fast. And so we had an economy built around tricks, around people not being responsible to their communities and to shareholders and just shoving as much money in their pocket as they possibly can - and here we are.

With tent cities reminiscent of the Great Depression starting to appear across the country, and queues of the poor and hungry growing fast, there's a growing chorus calling for a reassessment of the American dream - and the desire and greed that drives it.

REPORTER: What do you think other countries can learn from this experience, and learn from America?

JAMES MACKLIN: That we're going to have to tighten our belt, and spend what we really can afford and not become too extravagant in what we do. We have to go back to the old landmark - start anew. We can't turn it around bickering and fussing about mistakes. We gotta throw our mistakes in the river, and say "OK, let's regroup, let's rebuild this thing."

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Steve Keen's Oz Debtwatch

Bronte Capital

No man is free who is not master of himself.A ship should not ride on a single anchor, nor life on a single hope.Fortify thyself with contentment: that is an impregnable stronghold.

If you desire great things, do not attempt to lay hold of them with little effort; but give up some things entirely, and postpone others for the present.

Epictetus

The first and greatest victory is to conquer yourself; to be conquered by yourself is of all things most shameful and vile.

Plato

“The great enemy of clear language is insincerity. When there is a gap between one's real and one's declared aims, one turns, as it were, instinctively to long words and exhausted idioms, like a cuttlefish squirting out ink.”

George Orwell

Any one who thinks, and is determined to let nothing stop him from thinking, is a philosopher . . .R. G. Collingwood ~An Essay on Philosophical Method, 15.

Civilisation came through two things chiefly: the home, which developed those social dispositions that form the psychological cement of society; and agriculture..... But it was woman who gave man agriculture and the home; she domesticated man as she had domesticated the sheep and the pig. Man is woman's last domestic animal, and ....the last creature that will be civilised by woman. The task is just begun.

Will Durant

Great perils have this beauty, that they bring to light the fraternity of strangers.

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What we now suffer in economics is a hardness of intellect, a meanness of spirit, a narrowness of vision and a rigidity of thinking that utterly distorts the role of what economics in our society should be. Instead of economics being our tool for societal advancement, happiness, health, and sustainability, the profession has lost its way in econometrics, neo-liberal cant and equlibrium theory. It has become little more than cheerleaders to our enslavement to a towering edifice of debt, consumption and greed and the mouthpiece of vested interests. Unless repudiated we face not only economic but soceitial and ecological collapse. KMcKern ~ News Kontent